Fitch Takes Various Actions on SLM Student Loan Trust 2004-10

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has taken the following rating actions on SLM Student Loan
Trust 2004-10 (SLM 2004-10):

--Class A-5A 'AAAsf' placed on Rating Watch Negative;

--Class A-5B 'AAAsf' placed on Rating Watch Negative;

--Class A-6A 'AAAsf' placed on Rating Watch Negative;

--Class A-6B 'AAAsf' placed on Rating Watch Negative;

--Class A-7A 'AAAsf' maintained on Rating Watch Negative;

--Class A-7B 'AAAsf' maintained on Rating Watch Negative;

--Class A-8 'AAAsf' maintained on Rating Watch Negative;

--Class B 'BBBsf' placed on Rating Watch Negative.

The class A-8 note is Euro-denominated. At issuance, a currency swap
agreement was entered into by the trust to mitigate foreign exchange
exposure risk arising from the mismatch between U.S. dollar assets of
the trust and the Eurodollar liabilities of class A-8. The swap
counterparty's Issuer Default Rating is now below the minimum threshold
specified in Fitch's counterparty criteria. Fitch is currently in the
process of examining the sufficiency of arrangements for
collateralization of the swap.

In the event of the swap termination, the trust will be exposed to
exchange rate risk between the U.S. Dollar and the Euro. A significant
increase in the A-8 interest payment, caused by a depreciating dollar,
could reduce the collection funds available for interest and principal
payments, resulting in an increased risk of default for all outstanding
bonds.

Additionally, the placement of the A-7, A-8 and B notes on Negative
Watch is due to their inability to pass cash flow stresses necessary to
maintain their current ratings. On Dec. 4, 2015, Fitch released an
exposure draft that delineates revisions it plans to make to the 'Rating
U.S. Federal Family Education Loan Program Student Loan ABS Criteria',
dated June 23, 2014. This transaction was reviewed under both the
existing criteria and exposure draft.

Fitch expects to resolve the Rating Watch Negative status once its
revised FFELP criteria report is published and further review of the
collateral information posted by AIG Financial Products Corporation is
completed.

KEY RATING DRIVERS

Collateral Quality: The trust collateral consists of 100% of Federal
Family Education Loan Program (FFELP) loans. The credit quality of the
trust collateral is high, in Fitch's opinion, based on the guarantees
provided by the transaction's eligible guarantors and reinsurance
provided by the U.S. Department of Education (ED) for at least 97% of
principal and accrued interest. Fitch currently rates the U.S. 'AAA'
with a Stable Outlook.

Credit Enhancement: While both senior and subordinate notes will benefit
from future excess spread, the senior notes also benefit from
subordination provided by the class B notes. As of March 2016, total
parity is 100.00% and senior parity is 104.60% (4.40% CE). Cash is being
released from the trust given that the 100% total parity is maintained.

Liquidity Support: Liquidity support is provided by a reserve account.
The reserve is sized equal to the greater of 0.25% of the pool balance,
and $5,850,157.

Servicing Capabilities: Navient Solutions, Inc. (FKA Sallie Mae, Inc.)
is responsible for the day to day servicing of the student loans. Fitch
believes Navient Solutions to be an acceptable servicer of FFELP student
loans.

In December 2015, Fitch released an exposure draft that delineates
revisions it plans to make to the 'Rating U.S. Federal Family Education
Loan Program Student Loan ABS Criteria', dated June 23, 2014. Fitch has
reviewed transactions under both the existing and proposed criteria.

On June 9, 2016, Fitch published a press release titled 'Fitch
Finalizing Changes to FFELP Student Loan ABS Criteria' that details
likely changes to the final criteria report, which it expects to publish
in less than 60 days.

CRITERIA VARIATIONS

In certain LIBOR-down interest rate stress scenarios the basis spread
may be compressed, as Fitch would apply a floor to one-month LIBOR at a
negative rate level in accordance with Fitch's 'Criteria for Interest
Rate Stresses in Structured Finance Transactions and Covered Bonds' (May
2016). Since the updated interest rate stresses are not addressed yet in
existing FFELP criteria, this represents a criteria variation. Use of
the criteria variation did not have a measurable impact upon the ratings
assigned.

Under the 'Counterparty Criteria for Structured Finance and Covered
Bonds', dated May 14, 2014, Fitch looks to its own ratings in analyzing
counterparty risk and assessing a counterparty's creditworthiness. The
definition of permitted investments for this deal allows for the
possibility of using investments not rated by Fitch, which represents a
criteria variation. Since the only available funds to invest in are
those held in the Collection Account, and the funds can only be invested
for a short duration of three months given the payment frequency of the
notes, Fitch doesn't believe such variation has a measurable impact upon
the ratings assigned.

RATING SENSITIVITIES

Since the FFELP student loan ABS relies on the U.S. government to
reimburse defaults, 'AAAsf' FFELP ABS ratings will likely move in tandem
with the 'AAA' U.S. sovereign rating. Aside from the U.S. sovereign
rating, defaults, basis risk, and loan extension risk account for the
majority of the risk embedded in FFELP student loan transactions.
Additional defaults, basis shock beyond Fitch's published stresses,
lower than expected payment speed, and other factors could result in
future downgrades. Likewise, a buildup of CE driven by positive excess
spread given favorable basis factor conditions could lead to future
upgrades.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to
this rating action.

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IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
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RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR
RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY
CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.